Transmitting The Value Of A Product

Published Date: 02 Nov 2017

Marketing is the method of transmitting the value of a product or services to customers. It is considered as an organisational function and a series of process for creating, delivering and communicating value to customers, also, managing customer relation in ways that benefit the organisation. Through marketing analysis and market segmentation, organisations are able to select a target market, hence, understanding buyer buying behaviour. Furthermore, for a good marketing environment, a good marketing planning is essential. Marketing planning is all about framing a method for an organisation marketing activities. This plan can pertain to a specific product as well as to an organisation’s overall marketing strategy which in effect help in developing activities to achieve business goals. Also, in order to meet customers’ needs effectively, a company needs to consider the marketing mix.

2.1 Marketing Mix

No one element of the marketing mix is more important than the other- each ideally supplements the other. Marketers tend to rectify each element of the marketing mix to establish an overall brand image and an exclusive point of sale that will dissimilar their product from competition. The elements of the marketing mix are as follows:

Product- the features and appearance of goods and services.

Price- how customers pay for a product.

Promotion- how customers are informed about products.

Place- the point where products are made available to customers.

People- the way employees interact with the customers.

Process- how the service is delivered to the end customers.

Physical evidence- in which environment the goods/services are delivered to customers.

These elements are usually known as the 7 P’s. Marketing mix strategy is choosing and implementing the most practical course of operations to accomplish the organisation’s long-term objectives and to attain a competitive edge. Furthermore, marketing managers have the responsibility to analyse the external environment to better understand and satisfy customers’ needs, tastes and preferences. Besides, to influence customers’ purchase decision, marketers apply the promotional activities.

2.2 Promotion Mix

In this rapidly emerging force of competitions, companies need to restructure their marketing strategies to face the challenges in the marketplace. It is not enough to have attractive prices for products to be sold; hence promotion also is used to generate sales and profits (Sunday.A and Bayode.O, 2011). Promotion, which is one of the seven P’s in the marketing aspects, is widely used by organizations to communicate the benefits of their products to customers. According to Crane (2010) promotion is commonly used to influence and affect the behaviour of the target audience.

2.2.1 Promotion Mix Objectives

As reported by Rowley (1998), the main motives of exerting the promotional strategies are, to:

Increase sales;

Maintain and improve market share;

Create and improve brand awareness;

Gain competitive advantage;

Ameliorate promotional efficiency.

Promotion mix, which is also known as Marketing Communication Mix, involves informing, persuading and/or reminding customers (Omar, 1999) through sales promotion, advertising, personal selling and public relations in the retail sector (Berman and Evans, 2010).

2.3 Types of Promotion Mix.

2.3.1 Sales Promotion

Sales promotion encompasses the paid communication activities other than advertising, public relation and personal selling that stimulate consumer purchase and dealer effectiveness (Berman et al., 2010; Gilbert, 2003). Sales promotion is the process of persuading consumer to buy a particular product. Its aim is also to increase store traffic and rates of stock turn for a short term period to boost up sales (Wilson and Gilligan, 1997) hence, attractive schemes plays a significant role in shaping consumer evaluative reactions (Astous and Landreville, 2003). Berman and Evans (2010) identifies that sales promotion indeed increases sales but at the same time it is cost effective and may lead to reduced margins specially that offer financial inducement. Therefore sales incentives need to be carefully planned with the collaboration of the suppliers so as not to dissatisfy customers. To supplement the overall effort, sales promotion is often used with the collaboration of other promotional tools (Gilbert, 2003).

Lee (2002) divides sales promotion into two parts namely price-oriented and non-price oriented promotions. Price-oriented promotions include price discounts, coupons and rebates, while non-price oriented promotion include free samples, sweepstakes and so on – see summary of sales promotion in table xxx. Lee (2002) and Dawes (2004) assume that ,managers use price-oriented promotions more radically as they are primarily concerned about competitions, also, price promotions have a longer impact on sales category. However Dawes (2004) also added that consumers actively switch stores to take advantage of these promotions. In other words, one store may apparently seem attractive due to incentives schemes in one period and another may be more attractive in a subsequent period. Further to this, Tong et al., (2012) argues that price reduction results in drawing crowds into shops due to the fact that high price products often deter consumer purchase.

According to Berman and Evans (2010) merchandising forms part of sales promotional strategies just like the other incentives unlike Cravens et al., (2000) who consider merchandising to be one of the promotional tools itself. Merchandising is a marketing activity that ensures products are easily available, and prominently and attractively displayed at the point of sale (Pickton and Broderick, 1999). Merchandising adds value to the other sales incentives and make sure that buyers do not miss the scheme offerings. In other word, it influences buyer behaviour which is one of the major objectives of sales promotion.

2.3.1.1 Types of Sales Promotion

Types of sales promotion

Description

Point of purchase

Window, floor, and counter displays that allow a retailer to remind customers and stimulate impulse purchase.

Contests

Customers compete for prizes by completing a contest (game).

Sweepstakes

Similar to contest, except that participants merely fill out application forms and the winner is picked at random (chance).

Coupons

Special discounts are advertised with a coupon being cut out and redeemed as part of an at-store purchase.

Frequent shopper

Customers are rewarded by points or stamps for repeat purchase or total amount spent.

Prizes

Similar to frequent shopper programs, except that the retailer gives prizes immediately.

Samples

Free taste or smells of items are given to customers.

Demonstrations

Products and services are shown in use or what they can achieve and the benefits they give are demonstrated.

Referral gifts

Presents are given to current customers when they bring in new customers.

Branded giveaways

Items that contain the retailer’s name are given to customers.

Special events

Include fashion shows, autograph sessions with celebrities, art exhibition and holiday activities.

2.3.1.2 Sales Promotion Objectives

The objectives of sales promotion is to increase consumer demand, stimulate market demand and improving product availability. Some of the specific objectives of sales promotion are as follows:

To introduce new products or services

Sales promotion is usually used to induce prospective consumers to try new products and services. Dealers are always keen to introduce new products into the market, hence free samples. Trade discounts and cash discounts are offered to stock new products. These are the basic sales promotion measures.

To attract new customer

Sales promotion is also used to attract new customers. Usually, new customers are individuals who were previously the rival’s customers. Hence, samples, gifts, prizes, are measures that would encourage them to shift their patronage to new dealers.

To induce existing customers to buy more

It is more important to retain existing customers than attracting new ones. Sales promotion devices are used to induce existing customers to buy more and therefore preventing them from shifting to rival firms.

Help firm to remain competitive

To survive in that competitive world, most of the companies undertake sales promotion activities. Thus to remain in that competitive marketplace, firms have no better choice than going through the sales promotion activities also.

To increase sales in off-seasons

There are many products that have seasonal demand. Hence, dealers of such products have to make an effort to maintain a stable demand throughout the whole year. Thus discounts and off-seasons price reductions would help in the sales of such items in the market during slack seasons.

2.3.2 Advertising

Advertising is any paid form of non-personal communication through media (Gilbert, 2003) to inform and influence existing or potential customers (Hill and O’Sullivan, 1996) about an organisation and/or product. Advertising is carried out when a broad market is targeted, thus, message is transmitted through television, radio, newspapers, telephone directories, magazines, billboards, web pages, and among others. Customers are informed about the benefits being offered through advertisements besides; Omar (1999) added that "advertising stimulates store visits".

It is a fact that an environment without advertising makes it prohibitive for marketers to deliver any information pr message about their products or services to the viewers or buyers (Niazi et al. 2012). Further to this, Abraham and Lodish (1990, cited Omar 1999) stated that "advertising should be clearly planned, prepared, tested and placed in the appropriate media at the right time", as a matter of fact, viewer’s commercial avoidance behaviour diminishes the specificity benefits (Pitta et al. 2006). The research carried out by Niazi et al. (2012) found that there is a positive relationship of emotional response with regard to customer purchase. Emotional response is being defined as a positive attitude created by advertising in the mind of customers. Moreover through the research of Gazley et al. (2012), it can be noted that the respondents of their survey preferred advertisements that "talk to them or give them something to talk about" and also added that irritating advertisements curtails purchase intentions just like Paswan (2006) had stated.

Advertising has become a dominant area for marketing expenditure according to Goldrick (2002), and on the other hand Paswan (2006) found that cutting advertising does not increase short term profit.

2.3.2.1 Types of Advertising

There are different forms of advertising. Despite being different, each type produces a highly public exposure of messages and concepts to the general public (Gilbert, 2003). Thus, advertising is considered as a broad tool (Duncan, 2002). According to Berman and Evans (2010), there are four types of advertising content- pioneer, competitive, reminder and institutional advertisements. These types of advertising do also composed of the three major objectives of advertising, that is, to inform, to persuade and to remind.

Pioneer Advertisement

This type of advertising is usually carried out to create awareness and offer information. It is often new firms that provide this type of advertising in order to promote its product or develop a brand image.

Competitive Advertisement

Firms undertake this form of advertising to influence customers’ choice and preferences. Therefore, this advertising has a goal of being persuasive, that will capture people attention.

Reminder Advertisement

This advertising mostly targets existing customers and stressing on the attributes that made the company successful. Thus, it is a way of retaining the loyal customers.

Institutional Advertisement

The aim of institutional advertising is to keep the company’s name before the public instead of emphasizing on the sale of products. It is usually used to reinforce one or more of the following: wide merchandising selection, better service or quality, a leisure experience or a pleasure for shopping.

2.3.2.2 Developing Advertising Strategy

A great advertising depends upon the development of advertising strategy. The core elements of advertising strategy are: target audience, product concept, communication media and advertising message.

Target consumer

First of all, the marketer must know its target audience. In other words, who are those people that will ultimately purchase the products or who decide what product to be bought; for instance a child may want a product but it’s the parent who will purchase it. Also, knowing the target audience is one of the major aspects since consumers’ behaviour, needs, desires and demographic criteria differ from one another. Hence these forces act upon any purchasing decision.

Product concept

Secondly, this stage is crucial as it all depends upon the marketers how they establish the product in the market. The product positioning will determine the kind of values the product represents.

Media

The media represent the means by which the advertising message will be communicated to the consumer. There are different media mediums; however, marketers consider those that are most likely to reach the target customers.

Advertising message

After the target audience has been analysed, the product concept has been established and the media has been chosen, the effectiveness of the advertisement will rely on the message. The message of advertising needs to be strong enough to capture people attention. The message has to be clear and straight forward and marketers make sure that the product gets all the limelight.

2.3.3 Personal Selling

In the retail sector, managers make sure that the store’s physical atmospherics are continually managed and controlled (Kim and Kim, 2012). Personal selling, as described by Rowley (1998), is a face to face interaction with one or more prospective buyer for the purpose of making a sale. In retailing, the importance of personal selling differs based on the type of merchandised being offered (Gilbert, 2003). Personal selling involves salespeople communicating directly with customers with the purpose of exchanging information with the latter in order to satisfy their needs (Varley and Rafiq, 2004). This is done in the interest of developing long-term customer relationships (Berman and Evans, 2010). In addition, salespeople should possess good communication skill and knowledge to provide feedback to customers (Cravens et al.,2000). They are the one to communicate company’s attitude to customers and forward feedback to tne management, thus they are considered as an important intermediary between company and customer (Knight et al., 2007). The job of salespeople is also to handle conflicts between customers and company (Tseng, 2011), and deal with problem both in the interest of the company and customers benefits and satisfaction (Martin and Bush, 2003).

According to Varley and Rafiq (2004), personal selling is vital for a store because it creates impulse buying and improves relationship with customer. However, when customers have an abundance of information, they demand increased level of customer service and have higher expectations (Roman et al., 2002).

2.3.4 Public Relations

Public relations (PR) are the way how organisation manages its relations with its publics (Wilson and Gilligan, 1997). Publics are those groups of people- internally and externally- with whom an organisation communicates, for instance, media, customers, suppliers, shareholders, government and among others. PR activities are carried out with the aim of ensuring that "goodwill, trust, credibility and a recognition of mutual value" delineate company’s relationship with the publics upon whom the business success depends (Cravens et al.,2000).

PR as part of the communication mix is treated simply as a tactical publicity function. For instance, Moss et al. (1996), determined in their research that PR objectives at Russell and Bromley were only focused on achieving product publicity to support the marketing of merchandise. In retailing, it is obvious that the retailers communicate with final customers, here PR practice has an impact on manufacturers’ brand, since the latter has a major influence on customer purchase decision (Ilonen et al., 2011). PR practice is all about proactive plans and actions as it is crucial to adopt approaches that do not offend anyone, if not satisfying everyone (Khodarahmi, 2009). This profession is a "bellwether of profound societal change" as organisation themselves are dynamic and has an unpredictable environment since changes within the publics itself take place rapidly and so their demands.

Public relations is about identifying areas of deficiencies before deciding or launching something new (Laskin, 2012) in order to maintain the spectrum of relations between the store or company and its publics.

Manufacturers and retailers do confront some painful realities around the current effectiveness of their promotional activities. It is believed that consumers have developed some basic expectations and what they want to buy may be subjected to promotional strategies being offered. In the current economic downturn, customers’ expectancy regarding promotions have increased which is changing their behaviour. These strategies, in fact, work directly on purchase decision process and stimulate the impulse-buying urge (Steenkamp et al, 2005).

2.4 Buyer Behaviour

Consumer buying behaviour is a complex mix of emotional reasons for buying, and psychological and social influence. However, there is a set of pattern to the buying process- whether it is a simple thing like an apple or a complex one like a car. Therefore, to identify the demands of customers, managers firstly need to understand their buying motives and hence, ways to influence the buying process. This is so, to assure that their products or services are on the shopping list.

2.4.1 Buyers’ Decision Making Process

Buyer decision making may be defined as the process that underlines an individual’s choices about which product or service to buy (Omar, 1999). Marketers use theories and models to communicate with and influence the buyer at various stages- before, during and after purchase. Figure **** shows the different stages of purchase decision process.

C:\Users\user\Desktop\an review\buyer-decision-making-chart-horizontal.jpg

2.4.1.1 Need recognition

The buying process begins when an individual recognize a need. This recognition may be internally relative to a need arousal or externally influenced by people or the elements of promotion strategies.

2.4.1.2 Information search

At this very stage, individuals will gather as much information and look for solutions to their need pr problems. Here, the promotional tools can be of great impact in terms of helping buyers’ search for information, which indeed is one of its objectives (Cravens et al.,2000).

2.4.1.3 Evaluation of Alternatives

After the information search, individuals will also trace out acquired memory as to which products will satisfy their needs. However in the retail sector, according to Varley and Rafiq (2004), not only products’ brand or attributes affect the purchase decision it is rather the retailer’s corporate image that may "encourage a consumer to restrict their search and evaluation activity". Further to this, retailers have to use advertising effectively so as to prevent customers from making their purchase to a competitor’s outlet. The evaluation process is also highly influenced by customer loyalty.

2.4.1.4 Purchase

This is where an individual is ready for the purchase act (Berman and Evans, 2010). Personal selling and sales promotion will have a vital role to play as they are intended to influence the purchase decision. For example point of sales displays, salesperson’s opinions and others.

2.4.1.5 Post purchase behaviour

Even after the purchase is done the retailer will be judged by customers (Varley and Rafiq, 2004). The customer behaviour will determine whether he or she will revisit the store. In other words, this last stage of purchase decision is related with customer satisfactory level on the basis of their expectations of the product and store (Omar, 1999).

2.4.2 Black Box Model

The purchase process is often of a complex nature; hence effective managers use the black box model to gain insight into their target customer. The black box model is a stimulus-response system that helps to analyse the motives of buyers’ purchase. It is named black box because it is difficult to find out what’s on other’s mind. Hence retailers put forward all the promotional campaigns, according to Omar (1999), as they need to reassure that there is a reduction in cognitive dissonance. Cognitive dissonance may be defined as a "doubt that the correct decision has been made" (Berman and Evans, 2010). Berman and Evans stated that to overcome this dissatisfaction, retailers have to realize the purchase decision does not end with a purchase.

2.5 Impact of Promotion Mix on Buyers’ Decision Making Process

Buyers’ Decision Making Process

Promotion Mix Elements

Need Recognition

Information Search

Evaluation of Alternatives

Purchase

Post-purchase Behaviour

Sales Promotions

Advertising

Personal Selling

Public Relations

This table shows the impact of the promotion mix on the different stages of the purchase decision

2.5.1 Sales Promotion

There are three types of sales promotion strategies: push, pull or a combination of the two (Nochai and Nochai, 2011). The push strategy involves "pushing" the product through the distribution channels to the ultimate consumers. Typical tactics for push strategy can be: free trial, discounts, premiums and others. While the pull strategy is where the promotional activities attempt to get customers induced to buy the retailers products (Gilbert, 2003). Typical tactics employed by pull strategy can be: samples, coupons, cash refunds, loyalty programs rewards, etc.

2.5.1.1 Need Recognition

Sales promotion may influence an individual purchase decision at this very stage itself. In fact, sales incentives may create or develop a need arousal on the mind of customers. The combination of the push and pull strategies may push the customers to an unplanned purchase.

2.5.1.2 Evaluation of Alternatives

Here, more than the products benefits, it is the retail outlet carrying the sales incentives will be subjected as alternatives. Buyers will be keener to visit the stores whose sales incentives are more attractive.

2.5.1.3 Purchase Act

At this very stage, sales promotion has a significant role to play. The point-of-purchase sales promotions are in fact intended to influence the purchase decisions; such as samples, in-store merchandising. It is mostly the pull strategies that will induce customers for impulse purchase.

2.5.2 Advertising

2.5.2.1 Need Recognition

Advertisements in television, radio, billboards and others will attempt to precipitate problem recognition. The use of pioneer advertisements, stressing on the benefits associated with the purchase of the product, will develop a need for a particular product or store visit.

2.5.2.2 Information Search

Since the major objectives of advertisement are to inform, persuade and remind, this would aid buyer in the search for information.

2.5.2.3 Evaluation of Alternatives

When customers have a large variety of choices of products or brands, advertisements may assist them in the evaluation of choices. Specially, competitive advertising, which aim is to demonstrate a brand’s strength over competing brands (Cravens et al,2000), will be effective.

2.5.2.4 Post-purchase Behaviour

Communicating with the buyers after their purchase is also vital. Here the institutional advertisements will work. This advertisement will reinforce on the service and quality of the store. Once the customers are influenced by the advertisement and are satisfied with the products and services, they would communicate it to other people- word of mouth.

2.5.3 Personal Selling

2.5.3.1 Information Search

The main aim of personal selling is to provide information, especially when the product is complex and high value. This is also known as internal search, whereby the buyer decisions rely on attitudes and referrals of others.

2.5.3.2 Purchase Act

Like the sales promotions, personal selling also is mostly considered in this stage. At the point-of-purchase, there would be a large array of products displayed, thus, it is up to the sales persons how to influence and induce the customers to purchase a particular brand. This is a very formal source that often brings buying decision to a satisfactory conclusion for buyer and seller (khan, 2012).

2.5.3.3 Post-purchase Behaviour

Since sales persons have direct contact with the end buyer the former continues to influence the buyer after the product has been bought. The sales person assures that the buyer will revisit the store.

2.5.4 Public Relations

2.5.4.1 Information Search

While seeking for information, the public relations practices will help customers to learn about the product and also the image/reputation of the company. In case of bad publicity of a company, customers will not go further in the purchase decision.

2.5.4.2 Purchase Act

Effective use of public relation activities will influence customer to make purchase at a particular store or of a particular brand. Good public relations practice will be in terms of providing a good image in the market.

TABLE OF CONTENT

2. Marketing

2.1 Marketing Mix

2.2 Promotion Mix

2.2.1 Promotion Mix Objectives

2.3 Types of Promotion Mix.

2.3.1 Sales Promotion

2.3.1.1 Types of Sales Promotion

2.3.1.2 Sales Promotion Objectives

2.3.2 Advertising

2.3.2.1 Types of Advertising

2.3.2.2 Developing Advertising Strategy

2.3.3 Personal Selling

2.3.4 Public Relations

2.4 Buyer Behaviour

2.4.1 Buyers’ Decision Making Process

2.4.1.1 Need recognition

2.4.1.2 Information search

2.4.1.3 Evaluation of Alternatives

2.4.1.4 Purchase

2.4.1.5 Post purchase behaviour

2.4.2 Black Box Model

2.5 Impact of Promotion Mix on Buyers’ Decision Making Process

2.5.1 Sales Promotion

2.5.1.1 Need Recognition

2.5.1.2 Evaluation of Alternatives

2.5.1.3 Purchase Act

2.5.2 Advertising

2.5.2.1 Need Recognition

2.5.2.2 Information Search

2.5.2.3 Evaluation of Alternatives

2.5.2.4 Post-purchase Behaviour

2.5.3 Personal Selling

2.5.3.1 Information Search

2.5.3.2 Purchase Act

2.5.3.3 Post-purchase Behaviour

2.5.4 Public Relations

2.5.4.1 Information Search

2.5.4.2 Purchase Act